M&A Activity Forecast to be Cautious Yet Stable in Q2 2023

M&A activity is expected to remain stable during the second quarter of 2023, despite a host of geopolitical headwinds. While activity is forecast to remain at levels similar to those seen during Q1 2023, Q2 is expected to see a significant year on year increase compared to Q2 2022.

On a global level, Intralinks’ Deal Flow Predictor for M&A in Q2 2023 forecasts that activity will remain “neutral” compared to Q1 2023 – defined as anything ranging from a 5 per cent decline to a 5 per cent increase, with the report noting a “risk for negative movement”. Compared to Q2 2022, however, activity is expected to “outperform” - defined as an increase of 10 per cent or greater.

In its report, Intralinks notes that global headwinds so far have seemingly not been “materially hindering” M&A appetite. The report cites a study from Bain which found that acquisitive companies delivered higher returns during stress cycles than inactive companies, reiterating that the best-value M&A deals are often carried out during economic downturns.

Focusing on the EMEA region, the report found that M&A activity had been resilient, despite proximity to Russia’s war in Ukraine. Intralinks expects EMEA to see a “marginal uplift” in activity from Q1 2023 to Q2 2023, but, again, forecasts a “material uplift” of 10 per cent or greater compared to Q2 2022. This is mirrored in its forecasts for UK M&A activity, with “neutral” performance compared to Q1 2023, but “overperformance” compared to Q2 2022.